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ENFORCEMENT RULES OF ACT ON THE CREDIT GUARANTEE FOR AGRICULTURAL, FORESTRY AND FISHERY ENTERPRISERS

ENFORCEMENT RULES OF ACT ON THE CREDIT GUARANTEE FOR AGRICULTURAL, FORESTRY AND FISHERY ENTERPRISERS

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ENFORCEMENT RULES OF ACT ON THE CREDIT GUARANTEE FOR AGRICULTURAL, FORESTRY AND FISHERY ENTERPRISERS

Ordinance of the Ministry of Finance No. 853, Oct. 22, 1971 Amended by Ordinance of the Ministry of Finance No. 1250, Apr. 6, 1977 Ordinance of the Ministry of Finance No. 1411, Dec. 31, 1979 Ordinance of the Ministry of Finance No. 1480, May 20, 1981 Ordinance of the Prime Minister No. 532, Dec. 30, 1995 Ordinance of the Ministry of Finance and Economy No. 93, Jun. 1, 1999 Ordinance of the Ministry of Finance and Economy No. 213, July 31, 2001 Ordinance of the Ministry of Finance and Economy No. 482, Jan. 24, 2006 Ordinance of the Ministry of Finance and Economy No. 525, Sep. 29, 2006 Ordinance of the Ministry of Finance and Economy No. 563, Jun. 4, 2007 Ordinance of the Prime Minister No. 875, Mar. 3, 2008 Article 1 (Purpose)

The purpose of these Rules is to prescribe the matters necessary for the enforcement of the Act on the Credit Guarantee for Agricultural, Forestry and Fishery Enterprisers and the Enforcement Decree of the same Act. Article 1-2 (Fund Contribution of Financial Institutions) (1) The scope of financial institutions under the provisions of Article 4 (4) of the Act on the Credit Guarantee for Agricultural, Forestry and Fishery Enterprisers (hereinafter referred to as the "Act") means financial institutions falling under any of the following subparagraphs:

1. National Agricultural Cooperative Federation;

2. Deleted.

3. National Federation of Fisheries Cooperatives;

4. Cooperatives conducting credit business under the Agricultural Cooperatives Act as district agricultural cooperatives, district livestock ENFORCEMENT RULES OF ACT ON THE CREDIT GUARANTEE FOR AGRICULTURAL, FORESTRY AND FISHERY ENTERPRISERS

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industry cooperatives and cooperatives by item and by type of business which are members of the National Agricultural Cooperative Federation established under the same Act (including cooperatives conducting credit business under Article 14 of Addenda to Act No. 6018, Agricultural Cooperatives Act);

5. Cooperatives conducting credit business under the Fisheries Cooperatives Act as district fisheries cooperatives, fisheries cooperatives by the types of business and fishery products processing fisheries cooperatives which are members of the National Federation of Fisheries Cooperatives established under the same Act (including cooperatives conducting credit business under Articles 9 and 10 of Addenda to Act No. 7311, the Amended Act of Fisheries Cooperatives Act); and

6. Cooperatives conducting credit business under the Forestry Cooperatives Act as district forest cooperatives which are members of the National Forest Cooperatives Federation established under the same Act.

(2) The scope of loans as the standard of contributions which the financial institutions of the subparagraphs of paragraph (1) should make to credit guarantees for agricultural, forestry and fishery enterprisers under Article 4 (4) of the Act and the rate of contribution shall be as follow:

1. Financial institutions of subparagraphs 1 and 3 of paragraph (1): Annual rate of thirty-eight over ten thousand for average balance during one month of the loan, excluding loans under item (b) from those of item (a);

(a) Loans falling under any of the following among accounts on the balance sheet:

() Credit for loan out of the bank accounts;

() Loans falling under any of the following out of the trust accounts; a) Loans;

b) Corporate bonds of private equity funds (limited to those directly purchased from enterprises);

c) Purchased bills (limited to corporate bills directly purchased ENFORCEMENT RULES OF ACT ON THE CREDIT GUARANTEE FOR AGRICULTURAL, FORESTRY AND FISHERY ENTERPRISERS

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from enterprises); and

d) Credit for credit cards (limited to credit for purchase price corporate purchasing cards and corporate sale cards); (b) Loans falling under any of the following:

() Loans falling under any of the following among titles of credit for loan of bank accounts;

a) Loans falling under any of the following among domestic loans;

) Loans for construction funds among the loans for corporate funds;

) Loans for household funds;

b) Loans falling under any of the following among foreign loans;

) Loans for construction funds;

) Loans made locally by a branch, an agent, other business office or an office established in a foreign country by the financial institutions of subparagraphs 1 and 3 of paragraph (1); and

) Loans for an importing enterprise by method of direct remittance of the import price to the counterpart of such enterprise for payment of the import price by the financial institutions of subparagraphs 1 and 3 of paragraph (1) which have business relations with the importing enterprise, the repayment period of which is at less than a year.

c) Domestic import usage;

d) Offshore Loans in foreign currency;

e) Call loan;

f) Purchased bills (excluding corporate bills directly purchased from enterprises);

g) Purchased foreign currency;

h) Credit for credit cards (excluding credit for the purchase price on corporate purchasing cards and corporate sale cards);

i) Credit for debit cards (excluding credit for the purchase ENFORCEMENT RULES OF ACT ON THE CREDIT GUARANTEE FOR AGRICULTURAL, FORESTRY AND FISHERY ENTERPRISERS

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price on corporate purchasing cards and corporate sale cards);

j) Purchase of credit on repurchase condition;

k) Credit for factoring (excluding credit for which it is agreed that the financial institutions of subparagraphs 1 and 3 of paragraph (1) may exercise the right to request the reimbursement to a transferer of the credit for sale on credit);

l) Convertible credit to investment; and

m) Loans of gold;

() Loans falling under any of the following out of the title of loans of trust accounts;

a) Loan for construction fund out of the loan for corporate fund; and

b) Loan for household fund.

() Loans of financial funds and loans of public funds financial resources of which are funds financed from the Government or local governments and public organizations;

() Loans the interest balance of which compensated by the Government or local governments;

() Loans of public funds made to local governments or public organizations;

() Loans of loan funds;

() Loans among the financial institutions under Article 2 (2) of the Act;

() Loans based on contributions to the fund under Article 3 of the Enforcement Rules of the Korea Housing Finance Corporation Act and loans based on the contribution to the account under Article 5 of the Enforcement Rule of the same Act;

() Loans for property creating savings accounts holders under Article 45 (1) of the Act No. 3930, the Act on the Assistance to Residential Stability and Lump Sum-Raising Savings of Workers; and

() Loans as prescribed by the Financial Services Commission ENFORCEMENT RULES OF ACT ON THE CREDIT GUARANTEE FOR AGRICULTURAL, FORESTRY AND FISHERY ENTERPRISERS

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as loans for emergency funds to cope with changes circumstances the agricultural, forestry and fishery products market or the sudden price fluctuation, etc.; and

2. Financial institutions of subparagraphs 4 through 6 of paragraph (1) : Annual rate of 27/100,000 for the average balance of general loans and self-reliance deposit loans during one month among loans from the mutual financial fund.

(3) Judgements on loans under the items of subparagraph 1 of paragraph (2) shall be based on the balance sheet and its title of accounts according to the classification of the following subparagraphs:

1. In cases of financial institutions under subparagraphs 1 and 3 of paragraph (1): Balance sheet and its title of accounts submitted to the Financial Supervisory Service under the Act on the Establishment, etc. of Financial Services Commission under Article 11 of the Agricultural Cooperatives Act, Article 11 of the Fisheries Cooperatives Act and Article 47 of the Banking Act; and

2. In cases of financial institutions under subparagraphs 4 through 6 of paragraph (1): Balance sheet and its title of accounts drawn up according to the standard of settlement of accounts under Article 63 of the Agricultural Cooperatives Act, Article 66 of the Fisheries Cooperatives Act and Article 54 of the Forest Cooperatives Act. (4) Deleted. [This Article Wholly Amended by Ordinance of the Prime Minister No. 532, Dec. 30, 1995] Article 1-3 (Timing and Methods of Contributions) (1) The financial institutions of subparagraphs 1 and 3 of Article 1-2 (1) shall contribute a monthly contribution under paragraph (2) 1 of the same Article to the credit guarantee fund for agricultural, forestry and fishery enterprisers by the end of the following month under Article 4 (4) of the Act.

(2) When the financial institutions of subparagraphs 1 and 3 of Article 1-2 (1) contribute under paragraph (1), they shall submit the documents of the following subparagraphs to the credit guarantee fund for the agricultural, forestry and fishery enterprisers:

ENFORCEMENT RULES OF ACT ON THE CREDIT GUARANTEE FOR AGRICULTURAL, FORESTRY AND FISHERY ENTERPRISERS

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1. Account statement of contributions;

2. Documents proving the average balance during each month;

3. Detailed statement of loans falling under Article 1-2 (2) 1 (b); and

4. Other documents determined and publicly announced by the Financial Services Commission.

(3) The financial institutions of Article 1-2 (1) 4 through 6 shall contribute a monthly contribution to the credit guarantee fund for agricultural, forestry and fisheries enterprisers by the end of the following month through the National Agricultural Cooperative Federation, National Federation of Fisheries Cooperatives or National Forestry Cooperatives Federation to which the financial institutions concerned belong under Article 4 (4) of the Act.

[This Article Newly Inserted by Ordinance of the Ministry of Finance and Economy No. 525, Sep. 29, 2006]

Article 2 Deleted.

Article 3 Deleted.

Article 4 Deleted.

Article 5 Deleted.

Article 6 (Limits on Guarantee)

When the management institution (hereinafter referred to as the "management institution") under the provisions of Article 5 of the Act intends to provide the persons falling under any of the following subparagraphs with a credit guarantee, it shall undergo a resolution of the credit guarantee council for agricultural, forestry and fisheries (hereinafter referred to as the "Council") under the provisions of Article 3 of the Act:

1. Any person who has the credit guarantee funds for the agricultural, forestry and fisheries enterprisers repay the guaranteed obligation under the provisions of Article 12 (2) of the Act, and his/her surety liable jointly and severally: Provided, That a person who has fulfilled the obligations for the claim for reimbursement are excluded; ENFORCEMENT RULES OF ACT ON THE CREDIT GUARANTEE FOR AGRICULTURAL, FORESTRY AND FISHERY ENTERPRISERS

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2. A person who is in arrears of the fulfillment of the obligations to the financial institutions under the provisions of Article 2 (2) of the Act and to persons under subparagraph 2 of Article 9-2 of the Enforcement Decree of the Act on the Credit guarantee for Agricultural, Forestry and Fishery Enterprisers (hereinafter referred to as the "Decree"). [This Article Wholly Amended by Ordinance of the Ministry of Finance and Economy No. 93, June 1, 1999]

Article 7 (Agreements for Credit Guarantees)

When the management institution intends to provide a credit guarantee, it shall make an agreement with a person who will be the obligator and his/her surety liable jointly and severally.

[This Article Wholly Amended by Ordinance of the Ministry of Finance and Economy No. 93, June 1, 1999]

Article 8 (Application for Judgement on Irrecoverable Debt)) A creditor (hereinafter referred to as the "creditor") of obligations guaranteed by the credit guarantee fund for agricultural, forestry and fisheries enterprisers may, when a ground falling under any of the following subparagraphs arises, apply to the management institution for a judgement on irrecoverable debt under the provisions of Article 14 of the Decree:

1. When since three months have passed an obligator did not fulfill the obligation within the period (in case of loss of the benefit of time, referring to the date of such loss); and

2. When a ground as prescribed by the Council arises as a case difficult to collect the credit.

(2) In cases under paragraph (1), when the creditor is a financial institution, it is unable to apply for judgement of irrecoverable debt unless it has taken necessary measures for collection of the credit: Provided, That this shall not apply when a ground as prescribed by the Council arises as a case difficult to collect the credit.

[This Article Wholly Amended by Ordinance of the Ministry of Finance and Economy No. 93, June 1, 1999]

Article 9 (Examination for Judgement of Irrecoverable Debt) (1) When the management institution has received an application for the judgement of irrecoverable debt under the provisions of Article 8, it shall examine the matters of the following subparagraphs, and refer it to the ENFORCEMENT RULES OF ACT ON THE CREDIT GUARANTEE FOR AGRICULTURAL, FORESTRY AND FISHERY ENTERPRISERS

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Council, attaching a written opinion:

1. Whether the collection measures are appropriate or not;

2. Whether it is proper to appropriate the amount of money collected for the credit or not;

3. Whether the calculation of the amount of irrecoverable debt is appropriate or not; and

4. Limit on liability for the amount of irrecoverable debt. (2) When deemed necessary, the Council may listen to the opinion of the creditor concerned or investigate necessary matters in the examination for judgement of irrecoverable debt of paragraph (1). (3) In cases where the head of the management institution issues a judgement on irrecoverable debt under the proviso to Article 14 (1) of the Decree, he/she shall examine the matters of the subparagraphs of paragraph (1) and, when deemed necessary, may listen to the opinion of the creditor concerned or investigate necessary matters.

[This Article Wholly Amended by Ordinance of Ministry of Finance No. 1250, Apr. 6, 1977] Article 10 Deleted. Article 11 (Settlement of Amount of Reimbursement) In cases where the creditor has the credit under the credit guarantee and other credit for the same person, the reimbursement thereof shall be made pursuant to the credit guarantee contract.

Article 12 Deleted.

Article 13 Deleted.

Article 14 (Writing off Claims for Reimbursement) Notwithstanding the exercise of a claim for reimbursement, when it is impossible to recover the credit, the management institution shall write off the credit following a resolution of the Council. Article 15 (Ex post facto Management)

When a difficulty in preservation of credit has arisen or is apprehended to arise, the creditor shall notify the management institution thereof without delay. ENFORCEMENT RULES OF ACT ON THE CREDIT GUARANTEE FOR AGRICULTURAL, FORESTRY AND FISHERY ENTERPRISERS

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ADDENDUM This Decree shall enter into force on the date of its promulgation. ADDENDUM These Rules shall enter into force on the date of their promulgation. ADDENDUM These Rules shall enter into force on January 1, 1980. ADDENDA (1) (Enforcement Date) These Rules shall enter into force on the date of their promulgation.

(2) (Transitional Measure) The application for judgement of irrecoverable debt for the loan already financed at the time when these Rules enter into force, shall be in accordance with the former provisions. ADDENDUM These Rules shall enter into force on January 1, 1996. ADDENDUM

These Rules shall enter into force on the date of their promulgation. ADDENDUM

These Rules shall enter into force on the date of their promulgation. ADDENDA

(1) (Enforcement Date) These Rules shall enter into force on the date of their promulgation.

(2) (Applicability concerning Contribution) The amended provisions of Article ENFORCEMENT RULES OF ACT ON THE CREDIT GUARANTEE FOR AGRICULTURAL, FORESTRY AND FISHERY ENTERPRISERS

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1-2 (4) shall apply from the contribution for which the duty to contribute arises in the month to which the date these Rules enters into force. ADDENDUM

These Rules shall enter into force on October 1, 2006. ADDENDUM

These Rules shall enter into force on July 1, 2007. ADDENDA Article 1 (Enforcement Date)

These Rules shall enter into force on the date of their promulgation. Articles 2 through 5 Omitted.


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